What is free cash flow and how do I calculate it?

We can reconcile the free cash flow to the firm with the free cash flow to equity by noting that the difference between the two are: Interest paid on debt, and Net new debt financing. In other words, (EQ 14) Free cash flow to the firm = FCFE + 1-tax rate - interest ()net expense borrowings ⎡⎤ ⎢⎥⎣⎦ Valuation using free cash flow ................
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